🏡 Autumn Budget 2025: What the Latest Housing Announcements Mean for You
Chancellor Rachel Reeves has delivered the Autumn Budget, confirming major tax changes that will impact homeowners, landlords, and movers across the UK — including right here in Herne Bay.
While rumours of Stamp Duty reform proved unfounded, the Budget introduced two significant measures: a new ‘mansion tax’ for homes over £2 million, and a rise in income tax on rental income from 2027. Below, we break down what these changes mean and how they could influence local market confidence, pricing, and landlord behaviour over the coming years.
🏰 The New ‘Mansion Tax’ for £2m+ Homes (From 2028)
The most headline-grabbing announcement was the introduction of an annual surcharge — commonly referred to as a mansion tax — on properties valued above £2 million. This charge will sit on top of existing council tax.
- £2.0–£2.5m: £2,500 per year
- £2.5–£3.5m: £3,500 per year
- £3.5–£5.0m: £5,000 per year
- £5m+: £7,500 per year
The government will conduct a valuation exercise every five years to determine which band a property falls into.
Local relevance: Homes in Herne Bay rarely breach the £2m threshold, but the wider market could still feel the effects. High-value properties in London and the South East will face the brunt of the surcharge, and as activity slows at the top end, the knock-on effect may filter down through the wider chain — including mid-market coastal towns.
Rightmove data shows that fewer than 0.5% of UK sales agreed this year are for £2m+ homes, but sales in this segment are already down 13% year-on-year due to speculation about this tax.
🏘️ What This Means for the Market
Property expert Colleen Babcock has warned that while the tax is aimed at a small portion of the market, it could still create slower movement overall: distortions at the top end often lead to reduced fluidity lower down the chain. That includes first-time buyers, families, and key workers who depend on a functioning, confident market.
💷 No Changes to Stamp Duty
Despite months of speculation, there were no Stamp Duty reforms announced. This means existing thresholds and reliefs remain in place.
For buyers, this offers a degree of stability. For sellers, it means pricing strategies need to remain competitive and realistic, as no buyer incentives are arriving to boost affordability.
🏠 Landlords to Pay 2% More Income Tax on Rental Income (From 2027)
From April 2027, landlords will face a 2% rise in income tax on rental income:
- Basic rate: rising from 20% → 22%
- Higher rate: rising from 40% → 42%
- Additional rate: rising from 45% → 47%
Much speculation had suggested landlords might be required to pay National Insurance on rental income, so this increase replaces that idea — but still reduces net returns for investors.
📉 How This Could Impact the Rental Market
Landlords already face mounting pressures: reduced mortgage interest relief, higher compliance costs, and previous Stamp Duty increases. A further tax rise may compel some to:
- Increase rents to offset lost income
- Exit the market entirely, especially those with smaller portfolios
- Sell sooner rather than later to avoid future tax burdens
Property expert Colleen Babcock warns that targeting landlords often harms tenants in the long run: “The simple fact is that, in order to provide tenants with much-needed homes, landlord investors need to be able to make the sums add up.”
📆 When Will We See the Impact?
The changes come in two waves:
- 2027: Rental income tax rise
- 2028: Mansion tax implementation
Because the legislation is being introduced gradually, homeowners, landlords, and future movers have time to plan with clarity rather than uncertainty — something the market has lacked in recent months.
For now, housing professionals expect greater stability as speculation ends and households can finally make decisions with confidence.
🔎 What Does This Mean for Herne Bay?
While most local homes won’t fall into the mansion tax bands, the broader consequences — such as reduced fluidity in the upper end of chains and potential landlord exits — may influence supply and demand here on the coast.
What remains clear is that realistic pricing, strong marketing, and proactive agency support will be essential for anyone planning a move in 2025–2026.
